On September 4, Fair Isaac plunged 16.69% in regular trading, trading at $931.5/share, with turnover of $34.554 million. The steep decline was triggered by a landmark policy directive from the Federal Housing Finance Agency (FHFA) that formally dismantled the company's longstanding monopoly in credit scoring for mortgage lending.

FHFA Director Bill Pulte officially instructed Fannie Mae and Freddie Mac to permit all lenders to adopt the rival VantageScore credit scoring system, with the directive taking immediate effect. Pulte noted that a pilot program involving 50 lenders had already successfully originated loans using VantageScore. He further criticized Fair Isaac for raising the cost of obtaining a single credit score by 1,800% since 2020.

The policy blow compounded existing headwinds. The company's most recent quarterly results showed revenue of $674 million missing the $679 million consensus, while full-year revenue guidance of $2.53 billion fell short of the $2.56 billion analyst estimate, prompting multiple investment banks to lower their price targets. Earlier analysis from Raymond James had suggested that FICO's competitive position would prove resilient as most lenders were using both scores rather than replacing FICO, but the FHFA's formal mandate now significantly elevates the competitive threat.

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